Reform of French Insolvency Law Overview of The Executive Order of 12 March 2014

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Executive Order n° 2014-326 of 12 March 2014 reforming French insolvency proceedings was published in the Official Journal of the French Republic (Journal officiel de la République Française) on 14 March 2014.

Considered a priority by the Government, the objectives of this reform include, notably, favoring preventative measures and increasing the powers of creditors. Below are the principal provisions which will enter into force on 1 July 2014:

Amicable proceedings: mandat ad hoc, conciliation proceeding -

- Any clause in a contract which, as a result of the designation of a mandataire ad hoc or the opening of a conciliation proceeding, restricts a debtor’s rights or increases its obligations shall be deemed void.

- The order clarifies that new financing made available at any time during a conciliation proceeding will benefit from a “new money” superpriority or priming lien if the conciliation agreement is later approved by a court.

Please see full alert below for more information.

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Topics:  Commercial Bankruptcy, EU, Insolvency

Published In: Bankruptcy Updates, General Business Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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